Kuwait approves slash in income tax
Kuwait City, December 29, 2007
The Kuwait parliament has approved slashing of income tax from 55 per cent to 15 per cent.
Profits from stock trading, whether directly or through mutual funds, will also be totally tax-free providing the necessary fillip for foreign portfolio investment in Kuwait stocks.
With this move, Kuwait has joined the ranks of other GCC and ME countries in terms of tax code. Except Saudi Arabia, which has a five per cent withholding tax, none of the GCC countries impose any tax on capital gains.
In the past, foreign portfolio investment in Kuwait stocks has been held back due to uncertainty on tax code that prevailed till now. While the high tax rate of 55 per cent was believed to have never been implemented, the issue was hanging like a Damocles sword holding back foreign investment banks and institutions from directly investing in the Kuwait stock exchange, said an official spokesman.
Overall, except banks other companies are available for foreign investment to the extent of 100 per cent. Ownership in banks is restricted to five per cent of bank’s capital by a single investor. Exceeding this limit will require Central Bank’s approval. The overall limit of foreign ownership in banks continue to be 49 per cent. – TradeArabia News Service